Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/232603
Authors: 
Gabriel, Ricardo Duque
Klein, Mathias
Pessoa, Ana Sofia
Year of Publication: 
2020
Series/Report no.: 
Sveriges Riksbank Working Paper Series No. 400
Abstract: 
Using a novel rich dataset at the regional level, this paper provides new empirical evidence on the €fiscal transmission mechanism in the Eurozone. Our baseline estimates reveal a government spending relative output multiplier of 2.9, an employment multiplier of 1.9, and a cost per job created of €24,000. Moreover, we €find that a regional €scal stimulus leads to a signi€cant increase in private investment, productivity, durable consumption, and real wages together with a signi€cant rise in total hours worked driven by changes in the extensive margin (total employment), whereas the intensive margin (hours per worker) barely reacts. We estimate only small regional €fiscal spillovers but detect notable state dependencies. Regional fi€scal multipliers are larger in economic recessions, during €fiscal consolidations, and in the core countries of the Eurozone.
Subjects: 
Fiscal policy
Regional government spending multipliers
Eurozone
ARDECO
JEL: 
E32
E62
R12
Document Type: 
Working Paper

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